Copper prices have shot to historic highs, with the most-active COMEX contract hitting $5.3740 a pound (some $11,840 a tonne). Looming U.S. tariffs and world supply issues are behind the surge.
The U.S. government’s discussion of imposing tariffs on copper imports has led to traders rushing their shipments to the U.S., seeking to circumvent possible duties. Analysts believe that such tariffs may come into effect sooner than initially anticipated, further agitating market uncertainty.
The copper market globally is witnessing constricting supplies amid underinvestment and diminishing refinery capacities. Furthermore, increased demand from infrastructure projects, renewable energy projects, and electric vehicles has put the existing supplies under even more pressure.
Industry insiders foresee copper prices going up to $12,000 a tonne by the end of the year, spurred by persistent supply-demand shortages and geopolitics. Others warn, though, that the weakness in the global economy might impact future price action.
The recent surge in the cost of copper illustrates the complex interplay of trade policies, supply deficit, and increasing demand. The players must observe these patterns closely, as they have far-reaching implications in numerous sectors that rely on copper.
